Tag: crude

Tuesday, November 27, 2018

Daily Writing

8:58 AM

Gold remains rangebound hovering around the $1200 spot price. The price of gold has not moved outside of $1200 to $1235 per ounce since the middle of August.

Oil has started to hold ground at $51.00/barrel. We found an informative clip assessing the current oil pricing situation. In the current environment, which countries have the most impact on the price of oil? Which events or types of events have the most significant impact on the global price of oil?

German bunds move higher, as the yield on the 10-year bund continues to move lower. How are German and other European equities performing? What determines the price of German government bonds? How much impact does the European Central Bank (ECB) policy have on the domestic monetary policy of sovereign European states?

Wednesday, November 7, 2018

Daily Writing

9:21 AM

Crude oil has undergone steep declines over the past few weeks. What is the reasoning behind this? The U.S. Dollar index has started to show weakness over the past several weeks as well. According to experts, the weakness in the U.S. dollar index was expected after mid-term elections reflecting skepticism that the stimulus bonanza, including further tax cuts, that had fueled the dollar’s rally in the first half of the year, would continue under a split congress.[1]

We are eagerly awaiting two new developments from the UK and Europe in the coming days and weeks. Theresa May has ordered a push for a Brexit deal this week, ordering her attorney-general Geoffrey Cox to prepare a legal solution that would unlock an agreement between the UK and Brussels. We are keeping an eye on the impact of this week’s development on the GBP and EUR.

The second major development in Europe is also set to play out over the coming days. The Italian government has until November 13 deadline to submit a re-drafted budget proposal to the Eurogroup.[2] We don’t really see an easy resolution here, as “Rome’s populist government is standing firm ahead of a November 13 deadline to rewrite plans or escalate its stand-off with Brussels.”[3]

Something new to consider: the price of Uranium hit a 2.5 year high on November 5. Uranium has been one of the best-performing commodities of 2018, rising more than 40% from its April lows.

According to data recently released by the People’s Bank of China (PBoC) in October, the central bank’s foreign exchange reserves dropped by roughly $32bn on account of China’s push to strengthen the renminbi in the face of potentially disastrous devaluation. The PBoC is also intent on maintaining foreign currency reserves above $3tn, as these reserves serve as China’s means of suppressing the value of the renminbi. Official foreign exchange reserves fell to $3.05tn by the end of October from $3.087tn a month earlier. China’s forex reserves peaked at just under $4tn in mid-2014, but in the following two-and-a-half years the PBoC burnt through nearly $1tn to prop up the renminbi amid a capital outflow surge.

[2] The Eurogroup is the recognized collective term for informal meetings of the finance ministers of the eurozone—those member states of the European Union (EU) which have adopted the euro as their official currency. The group has 19 members.